Interview. “We must rapidly turn to Asian economies”

Latin America countries, before Mexico, have stepped forward in approaching this key region
Photo: EFE
11/02/2017
21:33
Rubén Migueles
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In light of the negotiation of the North American Free Trade Agreement (NAFTA), Mexico can embrace the opportunity to further its economic and trade relations with Asian countries, however, this must be approached without haste and with a well defined long-term strategy, warned Efrén Calvo Adamé, president of the Mexican Chamber of Commerce in China (MEXCHAM).

He added that, Mexico must turn to Asian economies without haste as it has not done the necessary field work to penetrate markets such as the Malaysian, Indonesian or Vietnamese. Take Malaysia, this country sold us over US$8,000m in goods, while Mexico only sold US$448m last year.

In his opinion, Malaysia could potentially purchase over US$2,000m or US$3,000m in food products from Mexico, but nobody is currently working on the sanitary protocols required for Mexican produce to penetrate the Malaysian market. These protocols could take years, and it is necessary for Mexican authorities to provide the necessary support to have these protocols authorized in only two or three months; it is necessary that the political force pushes the commercial gateway with Asian economies forward.

The same thing happens with Korea and India: “we have to open protocols and we must be able to establish strategies, because we lack any, we have settled with only five or six products that we currently sell in the whole of Asia. Similarly, we have to bring investments to Mexico, targeting stable and reliable partners from the Asian region.”

The Asian market, specifically the Chinese market, could purchase more from us if we set an organized long-term strategy in motion. This could double trade with the region, however, we must remain certain of continuity, something that we haven not done so well so far.

Mexico’s deficit with the giant from Asia amounted to US$64,000m last year, while we only sold Chine over US$5,000m. Calvo also estimated that until 2030 our direct sales to China could reach to over US$25,000m up to US$30,000m. He added that, there is a lot of work to be done in the Asian markets. Also, a strategy must be designed for trade with Japan, with whom we hold a US$13,000m deficit, while we have a US$11,000m deficit with Korea.

The only free trade agreemen working for us right now is the North American Free Trade Agreement (NAFTA) with the U.S., we hold a deficit with the rest of the countries, therefore, Mexican authorities and businessmen should take advantage of such unbalance to position our products in the Asian economies promptly and in the short run, before we have the run for presidency in Mexico and hold federal elections, noted Calvo.

The president of MEXCHAM noted that Mexico is reaching Asian markers at a late stage: “Brazilians and Argentinians took the lead here, we have to be able to commerce in a three-way strategy that includes federal, state and municipal powers. Somebody has to lay down the first brick.”

The agribusiness is the sector Calvo believes has greater chances in the Asian market, ranging from vegetables to beef and pork. Another segment can be found in the yet to be explored fisheries sector, followed by tourism, Chinese are keener on Latin American destinations, the biomedical sector, airspace, a sector that is becoming relevant in our country and which appeals to Chinese investors seeking to participate in any of the seven states where the airspace industry is being currently developed in Mexico.

Calvo also mentioned football, a sport that is becoming quite popular in Asian countries such as Korea, Japan and China. It is in the latter where the government is interested in creating professional football leagues and requires advisers and consultants in Mexico like the case of football club Atlas from Jalisco.

“The thing is that most Mexican businessmen are not acquainted with the Asian market, they have not stayed in these countries for long, they have not interacted enough with these countries for at least the necessary six or seven months that are required to be able to scratch the surface and understand the needs of Asian markets. Short visits do not help here”. Similarly, the Mexican government must be providing a specific trade promotion policy for Asian countries, we cannot use the same strategy as we use for the U.S. or Europe, even the one targeted to China has to be different, Calvo added.

For its part, Mexico does not have the necessary trade promotion infrastructure that would push significant exchange with the Asian region economies: “The current infrastructure in our chamber only includes seven offices in China”.

Calvo concluded that, “If the government wishes to participate, we would welcome its participation, or else we will continue to work in our path as our chamber has built bridges and we have the infrastructure to continue doing so. We lack the serious, prompt involvement of the government to this day, it is they who have to take initiative. If they don’t we will carry on with our efforts, it will be harder but we have created political, economic, social and cultural bridges to further and strengthen the economic and trade relations with the region”.

 

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